EDITORIAL: Hoping Budget will resolve issues in economy
AS the Budget and the Budgetary proposals become a reality and Barbadians complain about the negative impact the measures will have on them, questions will be asked as to just how effective these policy prescriptions will be in bringing about the desired effects.
Barbadians have resigned to the fact that the Budget is a tough one and that they are going to feel it in their pockets. Even the presenter, the Minister of Finance and Economic Affairs, Christopher Sinckler admitted the measures will cause an increase in the cost of living and would shave at least 0.5 per cent from whatever growth rate this country gets in 2017.
Government has said that it had some very pressing issues which it wanted to deal with. However, as people debate the effect of the proposals, the comments by Dr. David Estwick, the Minister of Agriculture and Water Resources Management, seem to indicate that the Budget does not go far enough and that more has to be done to lick the twin problems of high deficit and the high debt. He has even called for a restructuring of the overall national debt. So if what the doctor opined turns out to be the case, does it mean that the efforts of taxing Barbadians year after year is in vain? For the sake of the country and its people we hope that Dr. Estwick is wrong!
It must be admitted that the severity of the problems confronting Barbados calls for tough action. There is a deficit running at over six per cent of gross domestic product; the overall national debt is 150 per cent of GDP; productivity is low; foreign exchange reserves are dwindling; the reduction in private sector confidence is creeping back into the equation; and the Ease of Doing Business Survey has Barbados ranked around position 119 out of a total of over 180 countries. The impression therefore is that Government could very well be saying, ‘Look, there is a need to deal with these things in one swoop and get them behind us, so that the country can move on’.
Austerity is what commentators and some policymakers in the private sector were calling for in the lead up to the Budget. They assessed the challenges facing Barbados and came to the conclusion that the Government cannot shy away from its responsibility. Even the Minister of Finance admitted that if tough measures are to be taken then the measures will be well thought out. So if the deficit is to be lowered below four per cent, then it must be so since the policies announced are to do just that.
We hope that the targets set will be realized. The NSR levy should give the Government the revenue it wants, just as the two per cent commission on foreign exchange will inject over $52 million into the Government coffers between now and the end of the current fiscal year.
Very often we hear about delays in implementing policies because they seem not to be well thought out. One hopes therefore that this is not the case with the proposals announced last Tuesday, and that they will do what they are supposed to do, and that Barbadians will see the back of them shortly afterwards.